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TMI Blog2017 (9) TMI 1149X X X X Extracts X X X X X X X X Extracts X X X X ..... ure - Held that:- This ground of appeal has already been decided in AY 2009-10 and AY 2010-11 by orders of even date deleting the disallowance. Since there is no change in facts in this year we direct the ld AO to delete the disallowance accordingly for this year too. Transfer Pricing Adjustment - Held that:- As relying on earlier AYs we set aside this ground to the file of the ld AO with direction to determine ALP of the transactions. Disallowance on account of statutory liabilities payable - non-furnishing of challans for TDS payable on salary and on account of service tax - Held that:- In view of this matter, we allow assessee opportunity to the assessee to submit the evidences before the lower authorities for necessary verification within 15 days of the receipt of this order and Ld AO is directed to verify the same and decide the issue in accordance with law. - ITA No. 292/Del/2016 - - - Dated:- 18-9-2017 - SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Assessee : Shri Kanchan Kaushal, CA Shri Aditya Gupta, CA Shri Sandeep Puri, CA Ms. Chinu Bhasin, CA For The Revenue : Shri N C Swain CIT DR Shri T M Shivkumar, CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of the circuit accruals being disallowed for the subject assessment year, deduction should be allowed of the amount of accruals that are reversed/ utilized subsequently in the respective assessment years. 4. Disallowance of year-end accruals 4.1. On the facts in the circumstances of the case and in law, the Ld. AO/ Hon'ble DRP erred in making a disallowance of ₹ 97,29,438 (i.e. ₹ 1,20,98,089 being the disallowance for the subject assessment year after allowing credit of ₹ 23,68,651 already disallowed in the previous assessment year 2010-11) on account of year-end accruals representing accruals created towards normal business expenditure by the Appellant ignoring that the accruals were based on a reasonable and scientific basis. 4.2. Without prejudice, on the facts in the circumstances of the case and in law, the Ld. AO/ Hon'ble DRP erred in not recording that out of the year-end accruals being disallowed / during the subject assessment year, deduction should be allowed of the amount of accruals as are reversed/ utilized subsequently in the respective assessment years. 5. Disallowance of Support Service Expenditure 5.1 On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y selecting Comparable Uncontrolled Price ('CUP') method as the most appropriate method to benchmark the international transactions pertaining to availing of intra-group services by the Appellant from its associated enterprises, without duly establishing suitability thereof. 6.6 Without prejudice, the Hon'ble DRP erred in directing that payment by the Appellant for intra-group services is not wholly and exclusively incurred for the purposes of business and directing the Ld. AO to alternatively disallow such expenditure under section 37(1) of the Act, arbitrarily and without providing any opportunity of being heard to the appellant. 7. Disallowance on account of statutory liabilities payable 7.1 That on the facts in the circumstances of the case and in law, the Ld. AO/ Hon DRP erred in disallowing ₹ 23,626 on account of TDS payable on salary and ₹ 66,090 on account of service tax payable under section 43B of the Act. 8. Non-grant of credit for taxes deducted at source and advance tax 8.1 On the facts in the circumstances of the case and in law, the Ld. AO erred in not granting credit of taxes deducted at source amounting to ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e charges Lack of supporting documents 70,34,607/- Provisions not added back 97,29,438/- Support Service Expenditure 13,42,85,216/- Less : Deduction allowed for 35ABB 1,44,41,953/- Total Additions 38,73,89,460/- Assessed Income 1,22,62,04,402/ - 4. Therefore, assessee aggrieved with the order passed by the Assessing Officer u/s 144C(13) of the Income Tax Act has preferred appeal before us in ITA Appeal No 292/Del/2016. 5. The first ground is general in nature hence dismissed. 6. The second ground of appeal is with respect to the disallowance of ₹ 38,53,481 towards interest expenditure incurred in relation to the ECBs. At the beginning of the financial year relevant to the subject assessment year, ECB account had a credit balance of USD 22,500,000 as on April 01, 2010. During the financial year relevant to the subject assessment year, AGNS had availed additional ECB‟s of USD 2,500,000 on various dates. During the financial year, the appellant ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case and arguments and submissions advanced by both the parties in connection with the disallowance towards circuit accruals. This ground of appeal has already been decided in AY 2009-10 in I.T.A. No. 2538/Del/2014 and AY 2010-11 ITA No. 1059/Del/2015 of even date where in the disallowance on identical facts and circumstances is deleted. Since there is no change in facts in this year from the facts in preceding year, we also direct the ld AO to delete the disallowance accordingly. Hence, this ground no 3 of the appeal is allowed. 12. Ground No. 4 of the appeal Disallowance of year-end accruals. The detail of year end provisions outstanding as on 31.03.2011 was submitted by the appellant company. The details are reproduced as under: Particulars Accrual as on 31.03.2011 Accrual control account 13.99 crores SIP Accruals 3.21 crores Total 14.02 crores 13. Out of the above year end accruals the Ld. AO disallowed year-end accruals of ₹ 1.20 crores (Accrual control and SIP accrual) on account of non-submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction with the disallowance towards support service expenditure. This ground of appeal has already been decided in AY 2009-10, I.T.A. No. 2518/2014 and AY 2010-11 ITA No. 1778/2015 for even date and since there is no change in facts in this year from the facts in preceding year, we direct the ld AO to delete the disallowance accordingly for this year too. Accordingly, Ground no 5 of the appeal is allowed. 20. Ground No. 6 is on Transfer Pricing Adjustment. During the year, the assessee provided network connectivity services to customers of its Associated Enterprises ( AEs‟). For rendering such services, it availed certain services from its AE [i.e. AT T Communication Services International Inc., U.S.A.] in the nature of IT, network engineering, project management, service delivery, billing, and other support services and paid ₹ 101,27,19,418 to its AE on account of such services. The ld. TPO/AO determined the arm‟s length price of the said transactions to be Nil and proposed an adjustment. 21. Parties before us submitted that this issue is identical to ground in appeal of the assessee for AY 2009-10. Parties also reiterated the same arguments. 22. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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